Chinese Saving Dynamics: The Impact of GDP Growth and the Dependent Share

Carl Bonham and Calla Wiemer

No 201019, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: China’s national saving rate rose rapidly in the 2000s after declining through the late 1990s. These dynamics are not explained by precautionary motives, the institutional distribution of income, or reform related processes in general. Rather, we find a compelling explanation lies with GDP growth fluctuations and movement in the dependent share in population. We estimate a vector autoregressive model for the period 1978-2008, then generate in-sample simulations that successfully replicate the 2000s runup in the saving rate. Our out of sample forecasts show the saving rate dropping in the 2010s as the dependency share falls and GDP growth moderates.

JEL-codes: C32 E21 O11 O53 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2010-07-29
New Economics Papers: this item is included in nep-dev and nep-tra
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Citations: View citations in EconPapers (4)

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http://www.economics.hawaii.edu/research/workingpapers/WP_10-19.pdf First version, 2010 (application/pdf)

Related works:
Journal Article: Chinese saving dynamics: the impact of GDP growth and the dependent share (2013)
Working Paper: Chinese Saving Dynamics: The Impact of GDP Growth and Dependent Share (2012)
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